Gen Z Says Drinking Drove Them Into Debt

Gen Z’s alcohol habits are quickly bringing them into debt, and many are pledging to cut back on drinking to reach their financial goals.

In a new LendingTree report, 45 percent of drinkers say they’ve regretted overspending on alcohol or partying, and 17 percent said buying alcohol has even led to debt. The situation is far more extreme for Gen Z though, as 55 percent of the younger generation regretted overspending and 29 percent indicated they’d gone into debt over their drinking habits.

Altogether, 27 percent of all drinkers and 45 percent of Gen Z drinkers said alcohol had negatively impacted their finances.

While part of this overspending on alcohol can be associated with the common mistakes that any generation faces in their youth, there’s also some real economic reasons leading Gen Z into a path of debt for their drinking.

“It’s a big, big deal,” LendingTree chief credit analyst Matt Schulz told Newsweek. “They likely don’t have the financial wiggle room in their budgets that their older counterparts might have. They haven’t yet reached their prime earning years, so they’re taking home less money and probably don’t have the savings cushion that others might have.”

Garrett Bemiller, a 26-year-old living in New York City, is one Gen Z-er who’s seen the hard hit on his bank account after a night of drinking. He said at one time, he easily spent over $100 on bottles for just one night.

“I think the reason this is so common is that alcohol is so ingrained into socializing, especially when we’re young,” Bemiller told Newsweek. “I’m lucky that I’ve only had to deal with the repercussions short term as a side effect of social outings, but for those that go out often, I can imagine how much it damages them financially.”

While going out (and paying for it) has always been a common activity for the young, Bemiller thinks Gen Z might have it especially bad.

“I also think it’s intrinsically tied to specific struggles that this generation has to face that others before didn’t,” Bemiller said. “Alcohol and alcohol culture has always been around, but before overindulgence didn’t hit as hard as it does now.”

Today, Bemiller rarely drinks, in large part due to the financial repercussions alcohol had on his wallet.

But the alcohol-centric social culture, coupled with inflation, means Gen Z will be far more likely to go into debt as they enter their careers and make lower wages while still trying to participate in a social life.

They also are more enraptured in social media, which often shows extravagant nights out with friends and could paint this as normal. At the same time, Gen Z was forced to sit out many of their college years during a global pandemic, and the desire to get the most out of partying might be built up from that time, experts say.

“Especially with the years that Gen Z lost to the pandemic, this age group wants to go out and have fun, and many have not thought about mindful or moderate approaches to alcohol, which can save them money,” Nick Allen, CEO and cofounder of mindful drinking app Sunnyside, told Newsweek.

They’ve also just started learning what budgeting as an adult means, finance expert Andrew Lokenauth, founder of TheFinanceNewsletter.com, said.

“They are not yet accustomed to living within a budget,” Lokenauth told Newsweek. “Some are on their own for first time without parents setting limits.”

While Gen Z might be the most likely generation to go into debt for their drinking, they simultaneously have been leading the sober curious movement, and more and more are joining the charge each year.

A new survey from marketing company NCSolutions discovered that 61 percent of Gen Z-ers planned to decrease their drinking this year, up from 40 percent in 2023. In addition to health benefits, it might be because of Gen Z’s financial situation as well.

“In the same way Gen Z is most affected by alcohol debt, they are also increasingly damp or sober,” Bemiller said. “I think that trend says a lot about the economy and how we’re forced to cope with it.”

Alcohol is one of the items consumers are most easily able to overspend on, according to Lokenauth. That’s because it’s easy to lose track of just how much you’re spending as you drink progressively more throughout the night.

But there are far more consequences than just the next day jolt to your bank account.

“Missing work due to being hungover or drinking too much can impact one’s career and finances,” Lokenauth said.

How To Lower Your Alcohol Spending

Whether you’re a Gen Z-er or not, there are multiple ways to curb your drinking money habits, and they might even have some health benefits in the long run.

Lokenauth advocates for drinkers to set a designated spending amount for any night out, and stick to it. You can also opt to pre-game or go to places known for drink specials so you’re not feeling the financial pain of multiple top shelf cocktails later.

“Keep track of spending to stay aware of where money is going,” Lokenauth said. “Know when to call it quits for the night before going over budget.”

Of course, the most financially sound decision might be to opt for a sober night instead.

“They have grown up in a cashless society that relies on credit,” Melanie Dahl, a financial planner at Pennsylvania-based Creative Financial Group, told Newsweek. “This makes it easier to build up debt quickly. Once in debt, if habits don’t change, they are in a revolving credit cycle that’s hard to break.”

Overall, finding a less expensive and healthier way to blow off steam would be advantageous to all, not just Gen Z.

“It can cloud your judgment and lead you to buy other things on impulse that can wreck your budget,” Schulz said. “Drunk buying can be a real problem, especially today when it has never been easier to buy most anything with a click.”

Setting hard limits in your budget for your social life will help, but Schulz said you should also consider creating a “financial accountability partner.”

“If you and your close friends are open with each other about your financial situations, you’re probably less likely to put yourselves in situations where you might wreck your budget,” Schulz said. “That doesn’t mean that you have to open your books and share everything about your financial life with them. However, if you’re willing to make yourself a little vulnerable and share some of the goals you’re working towards, they’ll probably be more than happy to support you.”